Excel Switching Corporation Announces First Quarter Results; Q1 Revenues up 43%, Net Income increased 39% over Q1 1998.HYANNIS, Mass.--(BUSINESS WIRE)--April 27, 1999-- Excel Switching Corporation (Nasdaq:XLSW XLSW Excel Switching (former stock symbol; now delisted) ), a leading provider of open switching platforms for telecommunications networks A telecommunications network is a of telecommunications links and nodes arranged so that messages may be passed from one part of the network to another over multiple links and through various nodes. worldwide, today announced first quarter results for the period ending March 31, 1999. Revenues for the first quarter of 1999 increased 43% to $36.6 million from $25.6 million for the first quarter of 1998. Net income for the first quarter of 1999 increased 39% to $7.4 million from $5.4 million for the same period in 1998. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $0.19 for the first quarter of 1999 versus $0.14 in the first quarter of 1998, an increase of 36%. "We are extremely pleased with our results for Q1," said Robert Madonna, Excel's President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Due to the increased demand for our open technology, we've made significant strides in broadening our customer base. For the first time in our history, no one customer represented 10% or more of revenue, and sales to international customers increased from 11% in 1998 to 30% of revenue. In addition to our strong financial performance, we introduced several ONE Architecture(TM) products throughout Q1 and into Q2 including EXS EXS Expandable Switching System (Lucent) EXS Executed Schedule ExchangePlus, VDAC VDAC Vaginal delivery after cesarean section, see there card, EXS Media Gateway, EXS Call Control, EXS Services, and other related products. These releases are important to our strategic expansion into the converging con·verge v. con·verged, con·verg·ing, con·verg·es v.intr. 1. a. To tend toward or approach an intersecting point: lines that converge. b. voice and data network infrastructure markets. Excel also recently announced a definitive agreement to acquire RAScom, Inc. We continue to work on a project that began in 1998 to integrate RAScom's open remote access server technology into Excel's Expandable Switching System (EXS). The introduction of these voice and data products are expanding our addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be markets and creating exciting new business opportunities for Excel." Company highlights for the quarter include: New Products for Infrastructure Markets Excel announced EXS ExchangePlus, an integrated tandem and international gateway switch that enables service providers and carriers to quickly and cost-effectively roll out services in the competitive global market. Excel also confirmed its commitment to open programmable standards with the release of EXS Call Control and EXS Services, as well as additional ONE Architecture product enhancements included in Excel's software release 5.4. EXS Call Control is a programming environment that supports custom call models running on the switch. EXS Services is an open, subscriber-based service layer that enables carriers and developers to offer customized telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. . These and other EXS platform capabilities based on Excel's patented PPL PPL - Polymorphic Programming Language. An interactive, extensible language, based on APL, from Harvard University. ["Some Features of PPL - A Polymorphic Programming Language", T.A. Standish, SIGPLAN Notices 4(8) (Aug 1969)]. (Programmable Protocol Language) enable developers to quickly and cost-effectively implement new competitive services. EXS Media Gateway is an open programmable IP Telephony The two-way transmission of voice over a packet-switched IP network, which is part of the TCP/IP protocol suite. The terms "IP telephony" and "voice over IP" (VoIP) are synonymous. gateway that provides transparent bridging between legacy Public Switched Telephone Network (PSTN (Public Switched Telephone Network) The worldwide voice telephone network. Once only an analog system, the heart of most telephone networks today is all digital. In the U.S. ) Intelligent Network (IN) elements and new world IP-centric carrier services. EXS Media Gateway enables next generation telcos worldwide to address "real world" requirements with powerful, highly available and scalable communications for IP telephony applications on an open standards Specifications for hardware and software that are developed by a standards organization or a consortium involved in supporting a standard. Available to the public for developing compliant products, open standards imply "open systems;" that an existing component in a system can be replaced based platform. With the addition of the new Voice Data Access Concentrator See remote access concentrator. (VDAC) card, Excel has added comprehensive Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. (IP) transport and signaling capabilities to the EXS product family. The VDAC card is integrated into the EXS platform at the EXS signaling layer, allowing application developers and Excel's infrastructure solutions customers to easily and quickly IP enable the EXS based solutions. Strategic Acquisition On April 15, Excel announced that it had signed a definitive agreement to acquire RAScom, Inc., a leading provider of open remote access server (RAS (1) See network access server. (2) (Remote Access Service) A Windows NT/2000 Server feature that allows remote users access to the network from their Windows laptops or desktops via modem. See RRAS and network access server. ) technology. The acquisition of RAScom will expand Excel's addressable market by adding data capabilities to the EXS product line for the Internet Service Provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. (ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. ) and Competitive Local Exchange Carrier (CLEC (Competitive Local Exchange Carrier) An organization offering local telephone service that is not one of the traditional telephone companies. The Telecommunications Act of 1996 allowed competition to the incumbent telcos (ILECs), enabling new companies (CLECs) ) markets. The addition of the RAScom team will also bring technical expertise to Excel in the areas of access, LAN (Local Area Network) A communications network that serves users within a confined geographical area. The "clients" are the user's workstations typically running Windows, although Mac and Linux clients are also used. routing, VPN (Virtual Private Network) A private network that is configured within a public network (a carrier's network or the Internet) in order to take advantage of the economies of scale and management facilities of large networks. and other emerging data technologies. The acquisition is expected to close this week. Growth in International Customer Base Excel's plan to increase its direct international sales included the establishment of sales offices in Tokyo and Brussels in 1998. This increased presence has resulted in an expanded international customer base, which accounted for 30% of Q1 1999 revenue. About Excel Excel Switching Corporation is a leading provider of open switching platforms for telecommunications networks worldwide. Excel develops, manufactures, markets and supports a family of open, programmable, carrier-class voice and data gateways that address the complex needs of network providers. Excel's products are currently deployed in telecommunications networks worldwide. Visit Excel's website at http://www.xl.com. Note to Investors: This release may contain statements that are "forward looking," and is subject to risks and uncertainties that could cause actual results to differ significantly from expectations. Factors that might cause such a difference include, but are not limited to, those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Excel's highly competitive market; risks associated with Excel's concentrated product family and new product introductions; evolving market for telecommunications services and rapid technological change; possible delayed or lengthy sales cycles; risks relating to acquisitions; risks associated with efficiently and effectively integrating RAScom's product offerings and personnel; risks associated with international sales; dependence on and concentration of relationships with application developers, original equipment manufacturers and systems integrators; Excel's dependence on its proprietary rights; and other risks identified in the Company's Securities and Exchange Commission filings including those risks identified in the section entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "Risk Factors" of the Company's Annual Report for the year ended December 31, 1998 on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . Product and service names used within are trademarks, registered trademarks and service marks of their respective owners. -0-
Excel Switching Corporation
Consolidated Condensed Statements of Income
(in thousands, except per share data)
Three Months Ended
Mar. 31, Mar. 28,
1999 1998
Revenues $36,615 $25,556
Cost of revenues 10,785 7,580
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Gross profit 25,830 17,976
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Operating expenses:
Engineering, research
& development 7,424 4,726
Selling and marketing 4,750 3,920
General and administrative 3,326 2,418
from operations 10,330
6,912
Other income, net 1,349 1,648
- $ 7,416 $ 5,350
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Basic earnings per share $ 0.22 $ 0.16
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Diluted earnings per share $ 0.19 $ 0.14
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Basi Consolidated Condensed Balance Sheets
(in thousands)
Mar. 31, Dec. 31,
1999 1998
Current assets:
Cash and marketable securities $ 125,703 $ 118,096
Accounts receivable, net 36,220 30,912
Inventories 9,476 5,404
Deferred tax asset 7,430 7,461
Other current assets 4,446 2,013
--------- ---------
Total current assets 183,275 163,886
Property & equipment, net 20,674 18,438
Deferred tax asset 3,441 990
Intangible assets 9,360 9,702
Other assets 6,480 5,766
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$ 223,230 $ 198,782
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Current liabilities:
Current maturities of long-term obligations $ 4,262 $ 3,408
Accounts payable 9,428 5,102
Accrued expenses 13,936 16,874
Accrued income taxes 8,223 6,052
Deferred revenue 1,481 1,047
Recourse obligation 8,495 _
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Total current liabilities 45,825 32,483
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Long-term obligations 3,958 4,858
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Stockholders' equity:
Common stock 345 340
Addition paid-in capital 106,443 101,864
Deferred compensation (480) (526)
Unrealized gain on investments 51 107
Retained earnings 67,088 59,656
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Total stockholders' equity 173,447 161,441
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$ 223,230 $ 198,782
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